The LA Times ran the story this week about the FDIC seeking damages against three officers of the now-defunct IndyMac Bank.
"When the Federal Deposit Insurance Corp. seized Pasadena housing lender IndyMac Bank four years ago, the scene resembled the grim bank failures of the 1930s.
"Panicked depositors, seeking to reclaim their money, lined up outside branches of the big savings and loan, whose collapse under the weight of soured mortgage and construction loans helped usher in the financial crisis and biggest economic downturn since the Great Depression.
"As those memories fade, the government's effort to reclaim losses stemming from the financial debacle grinds on, with one IndyMac case winding up this week before a federal jury in Los Angeles.
"The civil lawsuit seeks damages from three former IndyMac executives, accusing them of negligence in approving 23 loans that developers and home builders never repaid, costing the bank almost $170 million.
"The executives approved ill-advised loans because they earned bonuses for beefing up lending to developers and builders, said Patrick J. Richard, a lawyer representing the FDIC."And what do the defendants say?
"This case," defense attorney Damian J. Martinez said in his opening statement Wednesday, "is about the government evaluating these loans with 20/20 hindsight after the greatest recession we've had since the Depression in the 1930s."It's a story worth noting because the FDIC, read here "us taxpayers," will never recoup the kind of money it has cost to rescue IndyMac. But the folks on trial should be thankful they don't live in China, crooked executives get a bullet in the head.
Read the full LA Times story here.
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